City prepares for audit

Updated 10:03 pm, Monday, July 30, 2012

Fiscal year 2011-12 ended June 30. The private auditors met with members of the Board of Finance's Audit Committee on Wednesday to discuss the city's objectives and timetable.

Committee Chairman John Louizos said he thinks the city is well-positioned to complete its laborious year-end review on schedule. The Department of Administration is fully staffed after filling critical vacancies in recent months, including for director, controller and internal auditor.

"I think it's procedure, procedure, procedure," Louizos said Wednesday. "I think we have the people in place. I think we're in a better place this year than we were last year in terms of that process. I think we also learned a lot from last year's management letter."

The firm has a three-year contract with Stamford, and was paid about $130,000 for last year's audit. An additional $12,500 was paid to audit the Water Pollution Control Authority.

Stamford hired the firm in 2010 in the wake of scandals that included the arrest of former city accountant James Santorella for stealing municipal funds and human resources worker Fred Manfredonia's theft of more than $350,000. The previous city auditor was New Haven accounting firm McGladrey & Pullen LLP.

The last two audits done by O'Connor, Davies did not reveal fraud or illegal activity, nor did the auditors identify any material weaknesses -- the highest level of risks. But the auditors found several notable, recurring issues in Stamford's books, including four significant deficiencies -- the second-highest level of risk -- in the 2010-11 financial statements related to the Old Town Hall Redevelopment Agency, general ledger account coding, Other Post Employee Benefits and process and communication.

The auditors detected a material weakness last year at the WPCA, which is audited separately. On Wednesday, auditors and Finance Board members said they expect the upcoming audit to find similar conclusions given continuing management and financial troubles at the sewage treatment plant.

Bruce Blasnik, a partner in O'Connor, Davies, said the firm is aware the WPCA has not hired an executive director, which last year's audit identified as critical to improving financial controls at the facility.

"From what we've seen to date, I think there's still going to be issues with the WPCA," he said

The firm will begin audit fieldwork Aug. 13. The auditors will issue their final reports to the Board of Finance by Dec. 31.